[PDF]Benefits of Farmers Markets

FRIENDS of the |

earth

for the planet for people



The economic benefits
of farmers' markets



Contents Page

1 Summary 3

2 Farmers' markets - what are they 4

3 The potential 4

4 The advantages of farmers' markets 4

4.1 The local economy 5

4.2 Farmers 9

4.3 Consumers 12

4.4 Social benefits 15

4.5 Environment 17

5 Why authorities should help 18

5.1 Local authorities 18

5 . 2 Regional Development Agencies 1 9

5 . 3 National government 2 1

6 Action being taken 22

7 Action needed by authorities 23

7.1 Local authorities 23

7.2 Regional Development Agencies 25

7.3 National Government 27

8 Conclusion 29



References
Contacts



Written by Simon Bullock, Friends of the Earth, with much help from Sandra Bell, Tim Jenkins,
Charlotte Bullock, Jenny Hey, Pippa Bennett, Jo Ripley, Nina Planck, Jonathan Smye and many
others, particularly in the USA and Canada.



1 Summary



Farmers' markets are springing up all over the UK. They are good for local economies, farmers,
consumers and the environment. Local Authorities, Regional Development Agencies and national
Government all have a role to play in ensuring that these fast-growing enterprises expand and
prosper. This briefing sets out



It focuses on farmers' markets, but the arguments are very similar in support of other "local food
initiatives" such as Community Supported Agriculture, farm shops, farm co-operatives, veggie
boxes and other initiatives selling food direct from farmers to consumers - these will be briefly
mentioned also. Farmers' markets are:

Good for farmers

- they're a different source of revenue, often crucial in today's difficult farming climate.

- they give farmers greater control over their economic lives.

- farmers can get higher prices - as the middle man is cut out.

- farmers diversify their skills - gaining marketing and business expertise.

- farmers get increased networking and learning opportunities with other farmers.

Good for the local economy

- more money is spent in the local economy, and it circulates in the locality for longer.

- there is high knock-on spending in other shops on market days.

- they provide an outiet for local produce, helping to start new local businesses and expand existing
ones.

- they reinforce local job and business networks, maintaining local employment.
Good for consumers

- consumers enjoy the atmosphere and experience of farmers' markets.

- consumers get fresh, healthy produce usually at competitive prices.

- they offer increased choice, and can offer extra fresh, affordable produce in areas with few such
options.

- they strengthen community - a key factor in the quality of life in the UK.
Good for the environment

- food travels less far; there are less "food miles".

- food has less packaging.

- they are an important outlet for farmers selling organic and less intensively-produced food.



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Why farmers' markets are so good;

Why local, regional and national authorities should support them;
What these authorities should do to support them.



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Farmers' markets and local food initiatives - what are they?



Farmers' markets are food markets where farmers and producers bring their produce for sale direct
to the public. There are usually rules for farmers markets. The main ones are that bought-in food
cannot be sold, and that food should be from "local" producers - where "local" is determined by
individual markets. The National Association of Farmers Markets in the UK exists in part to
accredit these markets and ensure standards are maintained.

There are other types of "local food initiatives". Many, like farmers' markets, also involve the selling
of food direct from farmers to consumers - like farm shops and farming co-operatives. Another
example with rapidly increasing interest is "Community Supported Agriculture" - where people
band together and pay farmers a yearly sum, in return for regular weekly or monthly deliveries of
food and a say in how the farm is managed and what produce is grown.

Veggie boxes are slightiy different local food initiatives which can often involve a middleman - a co-
operative or commercial body which delivers local food to consumers usually on a weekly or
monthly basis. Over 50,000 families 1 receive a veggie box each week in the UK. Some are co-
ordinated nationally (even by supermarkets) but the majority are small, independent ventures.

3 The potential

In 1999, three days of farmers' markets in Winchester, Hampshire generated total sales for farmers
between £70,000 and £85,000. An average of 10,000 visitors attended each market. Visitor and
farmer numbers increased by 50% each time. 97% of people attending wanted to go to more
farmer's markets, and all local stores reported major increases in takings.

In 1997 there were no farmers markets in the UK. Now there are 240. Turnover at UK farmers'
markets is currently £65 million a year 2 .

But there is even greater potential. In the USA, annual sales from farmers markets are over $1
billion. There is major support from national and state Government for these initiatives in the USA.

UK authorities - at local, regional and national levels - are starting to see the benefits and starting to
support farmers' markets. If UK authorities help these booming initiatives in similar ways as in the
USA, then we can expect to see thriving, diverse and competitive local food economies all over the
country.

4 Advantages of farmers markets

This section present arguments backed up mainly with evidence from the USA, where farmers'
markets have been flourishing for 15 years. The comparative lack of UK evidence is merely
because farmers markets are so new here.

4.1 The local economy

Farmers' markets make economic sense. In the USA they are seen as a sound business
proposition. For example, 90% of Illinois' 147 farmers markets are sponsored by a Chamber of
Commerce or merchants' association 3 , and the US Department of Agriculture report that 85% of



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farmers markets are economically self-sustaining 4 .

They can also command considerable turnover. The 26 th September 1999 farmers' market in
Winchester, Hampshire had sales of £30-35,000. The Stour Valley farmers' market injected
between £60,000 and £100,000 into the rural economy in 1999 5 . Combined annual sales from 19
farmers' markets in Ontario in 1998 was $73 million dollars 6 .

A survey of Rural Economic Development in New York State found that: 'Though they are not an
economic development panacea, farmers ' markets should be considered an important
component of a comprehensive local economic development strategy"' '. The rest of this section
sets out the local economic benefits of farmers' markets:

C Spending in farmers' markets has a high multiplier effect in the local economy

The multiplier is a measure of the number of times money circulates in the local economy before
leaving. A high multiplier means that money circulates more times in the local area before leaving -
money stays locally if it is spent on wages for local people or buying local produce; a low multiplier
means money leaves the local economy quickly on things like utility bills, profits to investors based
outside the area, insurance premiums, etc.

The effect of low multiplier effects - haemorrhaging of the local economy - has long been
acknowledged in the USA, particularly regarding food -

"Iowans spend nearly $8 billion annually on food. Most of these food dollars leave our
economy. Expanding local markets offers an opportunity to reverse this "value subtracted"
economy and invest a significant portion of the food dollars in Iowa" s .

The potential benefits of increasing the multiplier is just as great in the UK. Roger Thompson, from
Business in the Community in Cornwall says: "In Cornwall, £500 million per year is spent on
food. 75 per cent of that is imported from outside Cornwall. If we reduce that by just 1 per
cent, we have invested £5 million in our local economy'' 9 .

The economic benefits of buying local have just been highlighted by the Social Exclusion Unit. In the
best practice section of their Neighbourhood Renewal Strategy they cite a case in Oregon where:
"a community development corporation. .asked ten local business each to list 40 items
purchased outside of the State. They then contacted other local businesses that might be
interested in bidding on items form the list. In its first year, this initiative generated $2.5
million in new local contracts and 100 new jobs." 10

A strong local economy is particularly important in rural areas. The Government says that "without
a strong local economic base, many rural communities risk becoming little more than
dormitory facilities for urban commuters" 11 .

Farmers' markets can play a part in the economic development of areas. The US experience finds
that 'Whether in the form of weekly outdoor markets that convene only in the warmer
months, indoor market halls that operate every day year round, or entire market districts, a
number of American cities are finding that public markets are providing an effective strategy
for revitalising urban communities" 12 . This is in part because they have high multiplier effects:



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The multiplier for farmers' markets in Georgia is 2.66 13

A Canadian study of farmers' markets found that $500 million sales at farmers' markets in
Ontario generated $1000 million in spin-off activity 14 .

In contrast, spending at supermarkets for example greatly reduces the local multiplier, as most
revenue leaves the local area immediately.

Increasing the multiplier is an effective way of strengthening local economies - but is of particular
benefit in poorer areas. Economically depressed communities are invariably net exporters of
financial capital. Keeping money within an area is an important aspect of regeneration, which tends
to be overlooked in comparison with the traditional regeneration technique of bringing money into
an area. The Government's Social Exclusion Unit says: 'The problem is not necessarily that too
little money flows into a neighbourhood. Rather it is what consumers, public services and
business do with that money. Too often, it is spent on goods and services with no local
presence, and therefore immediately leaves the neighbourhood" 15 . West and McCormick argue
that "Regeneration programmes should have a core target of radically ring-fencing the local
economy to stop the haemorrhage of the little money residents have" 16 .

The need for strategies to keep money in neighbourhoods is now acknowledged by Government - it
is one of the key recommendations from the Social Exclusion Unit's National Strategy for
Neighbourhood Renewal 17 .

C Farmers' markets strengthen links between local businesses,

The National Farmers Union quotes the success of Duncan Penny, a Lancashire pig farmer 18 :

"/ would have gone out of business last autumn had it not been for farmers' markets. I had
no expertise but using a local butcher developed a range of pork products including
sausages, bacon and cured hams as well as fresh pork. The ultimate compliment is that many
of my customers are now regulars".

A study of local food "webs" in Sussex 19 found that retail shops were dependent on local
producers, and producers and wholesalers in turn depend on their rural outlets in the market towns
and villages. It found that "one of the most important findings was the extent to which local
shops sell locally produced food' '. Farmers' markets will help sustain and build up these local
food webs - because they are by nature outlets for local produce and because they keep money
within the local economy. The networks that farmers' markets foster can, as the Government says:
"underpin economic dynamism by creating opportunities for trading, collaborating and
learning" 20 .

The Sussex study cited above found that nearly all food producers started on a small-scale and
could not have done so without the outlets small shops provided. Many continue to depend on local
shops to sell their produce - a relationship which allows them to gain the business expertise needed
to develop new products and expand into wider markets 21 .

C Farmers' markets safeguard local jobs

The above study was commissioned because of the perceived negative local impacts of a proposed
superstore. The superstores' own organisation - the National Retail Planning Forum - found that



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there was a net loss of 270 local jobs on average each time a superstore opens. A trend towards
farmers' markets, strengthening local links, can be expected to have net job gains.

Farmers' markets have major potential for safeguarding jobs: a study in Ontario found that "a total
of 24,000 people are directly involved in preparing and selling the goods we find in [the
province's 127] farmers' markets'''' 22 .

Local food initiatives can also safeguard processing jobs in small businesses. The sale of "directly
marketed" livestock in Minnesota generates revenue of $43 million a year - $33m of farmer income,
and $10 million in processing fees/revenues 23 . This direct marketing is keeping small processors
afloat, and could help to safeguard equivalent jobs in the UK.

C Farmers' markets increase the diversity of the local economy

The Department of Environment, Transport and the Regions (DETR) reports that "large food
stores can and have had an adverse impact on market towns and district centres. It is vital
that those responsible for the future of market towns and district centres take positive steps
to improve the range and quality of food shopping in those centres" 24 . Farmers' markets offer
additional choice and help strengthen other small outlets.

C Farmers' markets facilitate business expansion

As farmers markets grow, there will be more opportunities for these rich local business links to
grow, creating more local businesses.

Farmers' markets also act as spurs for business start-ups and growth for producers, as well as
retailers. The US Department of Agriculture says that farmers' markets "play a vital role in
enabling small to medium sized growers to gain access to consumers. Without this access the
existence of many small-sized growers would be threatened" 25

US experience shows that selling at a farmers' market can also provide an opportunity for a part-
time grower to make the transition to a larger operation. 26

Farmers' markets facilitate product development and diversification. 81% of farmers surveyed at 9
farmers' markets in the USA said that the ability to test-market new products at their farmers'
market was beneficial 27 .



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Farmers' markets as ways of revitalising market towns



The Government reports that "Market towns have been under pressure from:



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economic restructuring

a loss of traditional activities such as livestock markets
the shift of services to larger towns
the growth in out-of-town retailing



It is important for rural communities that market towns retain their vitality

Farmers' markets are a key way to increase the economic vitality of market towns, for the
reasons cited above. North West Regional Development Agency say that "the vitality of
market towns is important to local residents, and to those in surrounding rural areas who
rely on them for shopping, employment and a range of specialist services. Many towns
have suffered a decline in fortunes in recent years - very few, for example, still have a
market. This has resulted from increasing centralisation of services, competition from out
of town shopping centres, the loss of traditional sources of employment and a lack of
investment. Market towns provide some scope for sustainable solutions to rural
diversification and can help to reduce inappropriate pressure on rural land from expansion
and larger scale developments. The NWDA will work with all relevant partners to identify
those in need of support and attention."



C Farmers' markets create large quantities of knock-on trade for local stores

Nick Brown, UK Agriculture Minister says that: "Farmers ' markets bring together town and
country in a beneficial way. They can help in delivering town and city centre revival".

On farmers' market days in Winchester, Hampshire, local stores reported 30% increases in
takings over the same day in previous years 29 .
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